If Ledgers pays a vendor for digital campaigns, can they seek reimbursement from franchisees?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Digital Campaigns**.** We may negotiate contracts with vendors such as Google AdWords. If you choose to participate, you must pay your pro-rata share either directly to the vendor or reimburse us if we are paying the vendor. (Franchise Agreement, Section 1.9.B).
Advertising Fund.** You agree to contribute 3% of your Gross Revenues into our Advertising Fund. Franchisor owned outlets do not have to contribute to the Advertising Fund, but may do so. We administer the Advertising Fund. The Fund is not audited. Unaudited financial statements of the Advertising Fund will be made available to you upon written request.
In our last fiscal year ending December 31, 2024, the Advertising Fund did not collect or spend any Advertising Fund Fees and there is no balance in the Advertising Fund.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 27–32)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, if Ledgers negotiates contracts with vendors such as Google AdWords for digital campaigns, franchisees may be required to reimburse Ledgers. Specifically, if a franchisee chooses to participate in these digital campaigns, they must pay their pro-rata share. This payment can be made either directly to the vendor or by reimbursing Ledgers if Ledgers is the one paying the vendor.
This arrangement means that franchisees have the option to participate in digital marketing campaigns managed by Ledgers. If they opt-in, they become responsible for a proportional share of the costs. The FDD specifies that Ledgers has sole control over all aspects of digital marketing related to the franchised business. This includes the right to create, operate, and promote websites, social media accounts, digital advertising, and other digital marketing means.
For a prospective franchisee, this implies a potential additional cost beyond the standard franchise fees. It is important to understand the extent of these potential digital marketing costs and how they are calculated. Franchisees should clarify with Ledgers the typical costs associated with these campaigns, how the pro-rata share is determined, and what level of participation is expected or required. Understanding these details will help in budgeting and financial planning for the franchise.
It is also important to note that franchisees are required to contribute 3% of their gross revenues to Ledgers' Advertising Fund. However, the FDD also states that in the last fiscal year ending December 31, 2024, the Advertising Fund did not collect or spend any Advertising Fund Fees and there was no balance in the Advertising Fund. This may indicate that digital campaigns are funded separately from the Advertising Fund, and participation is on an opt-in basis.